Latest technology, market info top priority for firms

by Mi Bong

HCM CITY — The ability to access market information and advanced technology were the two major factors affecting the business community in the second quarter of the year, according to Viet Nam Business Insight Survey.

At a seminar held yesterday in HCM City by the Viet Nam Chamber of Commerce and Industry, Pham Thi Thu Hang, head of the Business Development Institute, said the survey had received 374 responses from domestic enterprises.

Government investment in information and technology had helped further the use of advanced technology, they said.

Domestic and foreign market demand ranked second and third, respectively.

Some other influences included production costs, loan access, skilled human resources, infrastructure conditions such as water, electricity and wastewater treatment systems, transport infrastructure, land issues and site clearance.

The survey discovered that 65 per cent of businesses must borrow a short-term loan with an annual interest rate of 12-13 per cent and upwards.

Most of them said the interest rate was too high and would affect their investment plans.

The businesses said the interest rate should be adjusted to below 12 per cent to create favourable conditions to their production and business.

They expected there would be positive changes related to macroeconomic policies, loan access conditions and infrastructure improvement.

Vo Tan Thanh, director of the VCCI's HCM City branch, said the Viet Nam Business Insight Survey aimed to investigate and collect concerns and feedback from the business community through online fora.

It targets documenting the state of economy, industry and business environment in a timely and accurate manner.

The VBiS will also provide the Government as well as firms and executives with a precise and comprehensive insight into Vietnamese enterprise development and feedback on policy.

It was launched by the VCCI, the Asia Competitiveness Institute and the General Statistics Office under the sponsorship of the Asia Foundation.

At the seminar, Vu Van De, head of HCM City Statistics Department's Statistics-Industry Sub-Department, said industrial production growth in the first eight months of this year had increased 8.8 per cent over the same period last year.

The water and electricity distribution as well as production industry had the highest growth rate, 15.4 per cent, in the period.

The manufacturing and processing industry accounts for the highest, 60.1 per cent of total industrial production value, an increase of 11.6 per cent.

Challenges

Although industrial production has overcome the financial crisis period and seen a growth, it has faced challenges.

By early August, because of a drop in exports, the warehousing of manufacturing and processing products was fairly high, with an increase of 137.5 per cent over the same period last year, while consumption reached 112 per cent.

Power shortages in the first and second quarters affected the economy greatly.

Technical and trade barriers have made exports slow and unstable, causing a back-up of stored goods in the manufacturing and processing industry, according to the report. — VNS

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Exports to Japan total $4 billion in seven months

HA NOI — Exports to Japan in the first seven months of the year totalled US$4.1 billion, up 25.44 per cent over the same period last year, according to the General Statistics Office.

Export turnover accounted for 10.78 per cent of the country's total export earnings in January-July.

With earnings of more than $580 million, equivalent to a 13.17 per cent year-on-year increase, garments and textiles topped the exports to Japan in the first seven months.

Electric lines and cables followed with $508 million, up 83.25 per cent over the same period last year.

Although earning only $30.8 million in January-July, exports of rubber saw the highest growth rate with a surge of 199.95 per cent.

However, there remained seven export commodities to Japan that saw a decrease in the first seven months.

Among the commodities, exports of crude oil reduced 55 and 69.8 per cent to 169,000 tonnes and $102 million in terms of volume and value, respectively.

Exports of coffee, pottery products, precious stones, petroleum, pepper and cassava also reported reductions.

Japan mainly imports garments and textiles, rubber, mineral, seafood, and electric wire and cables from Viet Nam.

In recent years, exports of garments and textiles to Japan have risen constantly and the country is one of the three leading export markets for Viet Nam's garments and textiles, after the US and the EU. Despite the impact of the global financial crisis, the garments and textiles sector last year earned $1 billion from exports to Japan, a year-on-year increase of 20 per cent, with the figure expected to reach $1.2 billion this year. However, deputy director of the Ministry of Industry and Trade's Multilateral Trade Policy Department Le Quang Lan said that poor quality goods, inadequate information about the market, and a lack of familiarity with the Japanese business culture were obstacles that domestic exporters needed to overcome if they expect to better conquer the Japanese market. — VNS

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FDI disbursement lowers deficit

A production line at Singaporean- invested Cai Lan Vegetable Oil Company in Quang Ninh Province's Cai Lan Industrial Zone. Viet Nam's foreign direct investment increased by 3.6 per cent in August against the same period last year. — VNA/VNS Photo Hong Ky

HA NOI — Disbursement of foreign direct investment (FDI) in August reached US$850 million, lifting FDI disbursement in the first eight months of the year to $7.25 billion, up nearly 3.6 per cent over the same period last year, said the Ministry of Planning and Investment's Foreign Investment Agency.

The agency said the significant disbursement was useful as it helped the country offset its trade deficit that hit $8.15 billion in the first eight months of the year.

FDI pledges for new projects also increased in capital over the same period. With 125 projects worth nearly $2.5 billion licensed in August, the country granted licences to 658 FDI projects totalling nearly $10.8 billion, up 41 per cent over the same period last year.

However, capital injection into existing projects in January-August reached only $787 million, decreasing sharply from the same period last year.

Production of foreign invested enterprises in the first eight months of the year also recovered well. Among newly-licensed projects, processing and manufacturing industries accounted for the most with roughly 62 projects worth more than $3.66 billion. The electricity and real estate sectors followed in terms of capital with $2.9 billion and $2.3 billion, respectively.

Import spending by foreign enterprises was estimated to reach $22.37 billion by the end of August, jumping nearly 43.6 per cent over the same period last year.

Similarly, export turnover of foreign enterprises reached $23.96 billion, increasing 26.6 per cent over the same period last year.

The MPI expects the country's FDI inflow this year to increase by 10 per cent over last year's figure, to between $10 billion and $11 billion, while FDI pledges are forecast to hit $22-25 billion.

However, to improve FDI project quality, the ministry has drafted a new decree to replace the current Government Decree 108/2006/ND-CP which outlines the implementation of the Investment Law.

Under the new decree, scheduled to take effect later this year, all FDI projects must be in line with the Government's development master plan before being licensed.

It also requested foreign investors to regularly report the implementation pace of their projects to concerned agencies, said Planning and Investment deputy minister Nguyen Bich Dat. — VNS

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